The Omicron variant’s emergence will allow the supply of oil to overtake the rate at which the world is consuming it, easing the supply tightness of recent months, the International Energy Agency said Tuesday.
The IEA trimmed its 2022 supply forecast from non-OPEC producers by 100,000 barrels a day and cut its demand forecast by the same amount, saying it expects the surge in coronavirus cases to stymie the recovery in global demand.
Air travel and, in particular, the consumption of jet fuel, will be most affected by the Omicron variant, the IEA said in its monthly market report. But overall, the variant’s emergence will “temporarily slow, but not upend, the recovery in oil demand,” the Paris-based energy watchdog said.
Fears that the global economic recovery and resurgence in oil demand would feed inflationary pressures prompted major crude-consuming nations to tap their strategic oil reserves in November, just as Omicron infection rates began to gather speed.